MY INTERVIEW WITH THE SUIT MAGAZINE

When Eric Wilson, president of I Sell Health, Inc., researched health insurance as a business he might want to try, he learned that most people had a very limited familiarity with the industry.

Wilson opened his company – now a multi-state operation headquartered near Chicago – in 2004. To his surprise, it took longer than expected to get the business rolling.

Wilson already had experience with insurance professionals, first working for an auto-replacement firm and later for an auto-glass company. After advancing through the ranks at those companies, however, he was intent on going into business for himself.

Still intrigued by the insurance industry, Wilson considered property and casualty firms. Initially, he switched to the health sector because overhead costs were lower. In health insurance, an office staff managing claims wasn’t necessary.

Wilson’s first impressions – that the nature of health insurance seemed arcane – are still relevant today, with the implementation of Obamacare, or the Affordable Care Act (ACA). “Clients need someone who is knowledgeable – not just about the products, but also about ACA law, which changes constantly,” he noted.

Prior to the ACA, his clientele consisted mostly of self-employed people and mom-and-pop businesses. “They didn’t have corporate health benefits,” Wilson said, “And because there was underwriting, they had to be healthy.” Plans for the self-employed tended to be catastrophic in nature for cost purposes, as opposed to products for small groups that had lower deductibles. Wilson said, “With ACA, underwriting disappeared and everyone qualifies health-wise – a good thing. But we’re seeing more and more large companies drop their insurance benefits because the cost of insurance got higher.”

Compared to the more narrow scope of the clientele he serviced before ACA, Wilson said, “Now, nearly everyone is a potential client.” Wilson also works with people who have Medicare coverage.

Prior to ACA, carriers filed their health plans in each state where they issued policies. Some states had mandates, requiring areas of coverage, such as mental health or maternity benefits.

Companies differed from each other in the benefits they provided. Some would supplement their plans with add-on areas of coverage. Other companies specialized in specific types of coverage. This variety in what companies offered ended with ACA. Every ACA-compliant health plan must have these 10 essential benefits: (1) ambulatory patient services (outpatient care); (2) emergency services; (3) hospitalization; (4) maternity and newborn care; (5) mental health services and addiction treatment; (6) prescription drugs; (7) rehabilitation services and devices; (8) laboratory services; (9) preventive

services; and (10) pediatric services. “Choosing a plan is a little easier,” Wilson said. Clients view side-by-side comparisons of carriers on his company’s website. They can look at co-pays – how much, for example, one carrier requires, as compared to another.

“In 2011,” Wilson said, “commissions were cut in half.” He had to reduce his costs and add new products to sell – all part of changing his business model.

With underwriting then, “if you wrote 100 policies, maybe 90 percent qualified,” he said. “Of the remaining 10 percent, maybe 7 or 8 percent would qualify with a rate-up.” That is a policy surcharge to accommodate a potential client’s medical condition.

If people were not going to be able to qualify or had limited resources, then agents couldn’t spend too much time with them. Time was critical when, as Wilson put it, “You had to write a lot more policies.”

“As ACA emerged in 2014, commissions were cut again,” he said. “Though premiums increased, it wasn’t enough to offset the reduction in commissions.” Yet, agents no longer had to consider how a carrier would view a potential client with a pre-existing condition – underwriting was gone.

“Another change affecting how agents conduct their business,” Wilson noted, “is a shrinking selling season. Last year, open enrollment was October to the end of March. This year, it’s November to February.”

Wilson said that he wrote about 250 applications during the open-enrollment period last year. In the first eight months of 2014, he has written 200 applications.

“And, the number of carriers has diminished,” he said, remarking that they’ve gone out of business, or more likely, have left the health-insurance market.

With its 10 essential health benefits, ACA has moved the industry toward uniform standards. “Yet, state control of pricing should exist,” he said. “Some states – like Alaska and Florida – just have different needs.”

“In an ideal world, you’d make every carrier offer the core benefits, but you’d get to choose what you think you need.”

When he started in the business, Wilson said that he’d sit down with as many people as he could to acquire clients. No-shows meant time wasted. On other occasions, he’d drive distances to see potential clients, sell the policy, and then the new client would cancel it almost immediately. “People felt compelled to buy because you had driven out to see them.”

Contemporary technology like electronic signatures and web conferencing, has changed all that. “There’s no pressure with online meetings,” he said. Wilson also blogs to drive traffic to his website, writing topical essays, such as “Not all Cancelled Health Insurance Policies were ‘Junk.’ ”